Scripps Networks (SNI) Q1 Earnings Beat, Revenues In Line

Scripps Networks Interactive Inc. (NASDAQ:SNI) reported better-than-expected results in the first quarter of 2017. The company’s earnings (excluding special items) of $1.53 per share surpassed the Zacks Consensus Estimate of $1.18. Also, the bottom line improved 11.68% on a year-over-year basis.

The company’s first-quarter operating revenues of $855.1 million were in line with the Zacks Consensus Estimate. Revenues were up 4.7% year over year on strong TV advertising and distribution revenues in the U.S.

First-quarter consolidated segment profits (on an adjusted basis) totaled $368.7 million, up 6.3% year over year. Quarterly operating income (on a reported basis) rose 13.6% year over year to $329.55 million.

At the end of the first quarter of 2017, Scripps Networks had $107.67 million in cash & cash equivalents and $2,803.5 million of outstanding debt (less current portion) on its balance sheet, compared with $122.94 million and $2,952.4 million, respectively, at the end of 2016. In addition, free cash flow at the end of the first quarter of 2017 was almost $164.93 million, compared with $221.98 million in the prior-year quarter.

Segmental Performance

U.S. Networks

Quarterly revenues came in at $736.9 million, up 4.9% year over year. Advertisement revenues climbed 5.1% year over year to $512.1 million oncontinued strength in pricing in the U.S. advertising market for the company’s lifestyle offerings. Distribution revenues also increased 4.5% year over year to $211.1 million, driven by an increase in negotiated annual rate and revenues from new over-the-top distribution platforms.

Other revenues improved 6.9% year over year to $13.7 million. Segmental (adjusted) profits came in at $383.6 million, up 5.6% year over year on higher revenues.

Segmental operating revenues from brands like HGTV, Food Network, Travel Channel, Cooking Channel, Digital Business and other revenues improved 5.3%, 6.1%, 1.9%, 11%, 4.3% and 10.2% year over year, respectively. Nonetheless, DIY Network and Great American Country revenues dropped 2.5% and 1.4%, respectively, year over year.

International Networks

Quarterly total revenue of $125.5 million was up 3.5% year over year. Segmental adjusted profits totaled $15.5 million, up 58.16% on the back of higher revenues.

Conversely, loss (adjusted) from the Corporate and Other segment widened to $30.4 million from $26.3 million a year ago.

Zacks Rank & Key Picks

Scripps Networks currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the Broadcast Radio and Television sector are Central European Media Enterprises (NASDAQ:CETV) , Nexstar Broadcasting Group (NASDAQ:NXST) and Salem Media Group (NASDAQ:SALM) . All of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Central European Media, Nexstar Broadcasting and Salem Media gained over 54%, 15% and 17%, respectively, on a year-to-date basis.

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